In 1956, King Hubbert predicted peak oil production in the US. Through technology and trajectory, the “shale revolution” reversed declines in 2008 and production began to grow.

In 2014 as oil was crashing and companies scrambled to drop rigs, I incorrectly predicted US production would never exceed June 2015 volumes of 9.6 mmbo/d. Why? The Bakken and EF were being drilled too tightly; parts of the plays only worked at $90/bbl and at $50, they would cease and that would be that. I was wrong.

I didn’t appreciate the breadth and depth of what was happening in the Permian. HZ wells, big fracs and falling costs made the Midland and Delaware basins the drivers of US production and its geographic size and huge stacked column made it the only basin that never stopped growing.

But, like every historical basin, after 5 or so years, it changes. Actual US production growth has slowed since Nov 2018 in spite of completing more wells than any time in the last 5 years. With the H2 activity ramp down and more dramatically, parent-child depletion issues, I think Aug ‘19 will end up being the new peak oil. This week’s series will explore the data that supports that: activity levels; the end of productivity enhancements; inventory levels and wedge decline rates. Stay tuned!